Development, Environment, and Faith-based Groups Call on Congress to Redirect Climate Funding from World Bank to United Nations

WASHINGTON, D.C. — In response to this week’s House Appropriations Committee mark-up of the State and Foreign Operations Appropriations bill, ActionAid USA, Center of Concern, Church World Service, Friends Committee on National Legislation, Friends of the Earth US, Gender Action, Jubilee USA Network, and Maryknoll Office for Global Concerns issued the following statement:

We welcome the appropriation of $50 million for two United Nations climate funds — the Least Developed Countries Fund (LDCF) and the Special Climate Change Fund — as a step in the right direction. However, we are alarmed that the amount designated for the United Nations is six times less than what is appropriated for the World Bank’s controversial new Climate Investment Funds. The $50 million is also far less than what developing countries urgently need in order to adapt to the impacts of climate change. Therefore, we urge the Senate Appropriations Committee to appropriate an additional $75 million for the LDCF, in effect shifting the House appropriation out of the Strategic Climate Fund.[1]

Adequate financing for clean technology and adaptation to climate change in developing countries is critical to reaching a global climate agreement in Copenhagen. Developing countries have indicated that climate finance mechanisms should be governed by the United Nations, rather than the World Bank, both to ensure their effectiveness and to build the trust necessary for achieving a global agreement.

The 8-year-old Least Developed Countries Fund is intended to provide funding to least developed countries to prepare and implement their National Adaptation Programs of Action (NAPA). NAPAs were designed through a bottom-up process by local governments and civil society to identify urgent and immediate climate adaptation needs. But the LDCF is so under-resourced that, despite the fact that 38 NAPAs have been completed, there is not money for countries to implement their urgent priority projects. The United States has yet to contribute to the fund.

The World Bank’s Strategic Climate Fund, on the other hand, represents a top-down initiative that lacks meaningful participation from civil society or from affected communities. Moreover, the Pilot Program on Climate Resilience, the first operational program of the Strategic Climate Fund, has been severely criticized for providing adaptation funding in both grants and loans, thereby exacerbating the debt burdens of impoverished countries.

Since the LDCF is the more equitable and effective alternative, there is no justification for any U.S. multilateral adaptation funds to go to the World Bank.

Finally, we welcome the Committee’s recommendation that the World Bank’s Clean Technology Fund (CTF) should only support truly clean, zero carbon technologies. But the CTF can still finance dirty energy projects such as coal and remains as an obstacle to better, more equitable climate financing mechanisms under the UN, as called for by developing countries. If the World Bank wants seriously to address global warming, it would do well to look at its own carbon footprint; the Bank increased fossil fuel lending by 102 percent in 2008, while coal lending increased 648 percent from 2006 to 2008. Congress should recognize that such a track record hardly qualifies the World Bank to lead on clean technology investments or adaptation financing.

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[1]The bill earmarks $225 million for the World Bank’s Clean Technology Fund and $75 million for the World Bank’s Strategic Climate Fund, while also stating in report language that “not less than $50 million should be provided to the Least Developed Countries Fund and to the Special Climate Change Fund.”